The payday loan industry has been placed under a microscope in Great Britain. For the past three years, the nation’s leading financial watchdog has significantly scrutinized every action, every move and every complaint in relation to the payday loan business. And it’s at it again.
According to a new report from the London Telegraph, the Financial Conduct Authority (FCA) has confirmed that it will be canceling the interim permission and prohibit the sole director of Wage Payment and Payday Loans Limited (WPPL) from working in the financial services sector. This firm has also operated under the names of Payday Overdraft, Wagepayday and Doshloans.
Reportedly, the FCA made the move after the company did not meet the minimum requirements regarding the appropriate resources and suitability.
Morever, WPPL director Andrew Barry Hart has been banned from having any role in financial services that are regulated by the FCA. Regulators had determined that Hart was not fit in his position, adding that he did not have the competence or integrity to function in his role.
The FCA contends that WPPL customers were unfairly treated and were misled. When they had made complaints to the corporate headquarters, they were oftentimes ignored by management.
It’s alleged by the FCA that the WPPL director failed to employ certain policies and practices when examining the creditworthiness and affordability of payday loan borrowers. The FCA further contends that Hart did not maintain communications systems in order to speak with clients to inform of their loans.
“Mr Hart’s failings had a direct impact on WPPL’s customers, who were often treated unfairly and were frequently misled,” the FCA said in a statement. “Customer complaints were commonly disregarded, and excessive sums were taken out of some customers’ bank accounts. In some cases these practices caused financial loss to customers, many of whom were already in financial difficulties.” (http://www.financialreporter.co.uk/finance-news/fca-cancels-reckless-payday-lenders-interim-permission.html)
Both WPPL and Hart have argued against the FCA’s motion. They have since sent their cases to the Upper Tribunal, and any further notices will be pending amid the Tribunals decision.
In August 2014, the WPPL had submitted an application to the FCA for its interim permission. Since then, the WPPL has not received the necessary permission to extend payday loans for bad credit to consumers or participate in any collections of past debts – in only certain circumstances it has been permitted by regulators.
Ultimately, the FCA has now made the decision to cancel the alternative financial services firm’s interim permission. Whether or not it is abided by remains to seen. The Tribunal will publish its decision on its website. This is expected to come within the next several months.
The FCA has been working diligently since 2013 to rein in the payday loan industry. They have warned that taking out a payday loan in the past meant being stuck in a vicious cycle of debt because of exorbitant rates of interest and other fees and charges. Since the FCA imposed new rules and regulations on the industry, the number of new payday loan businesses has slowed down, and many old time players have even left the country altogether.